The Creative Age: Part 1
Crypto, tech, gas, markets. These four words have been thrust into our daily content diet over the past couple of months and will most likely stay for the foreseeable future. 12 months? 24? It’s hard to tell.
In the venture world, Sequoia conveyed thoughts that many firms are also communicating to their portfolios. Preserve cash. Extend runway. Get to your promised valuation (which is probably inflated).
Within all the chaos, one group hasn’t gotten much attention: the beloved creators. Six months ago, you couldn’t say ‘venture’ or ‘tech’ without also including ‘creators,’ so let’s not forget about them now.
Back in 2008 – 2012 (the last major recession), the creator economy hadn’t quite reached maturity yet, so all it has ever seen is green. Now, this new category player is going through its first economic cycle.
How can a small business built around an individual’s IP push through turbulent times? Here’s a breakdown of what we think is to come:
Prediction: Creators will need to double down on building stronger case studies and start actively pitching to a pipeline of brands that are more cautious with their dollars. The creators that can pitch a strong story around ROI and adapt a collaborative approach to drive the bottom line will come out on top. Brands will expect more bang for their buck. We predict there will be an influx of tools that will help creators ‘professionalize’ in this manner.
With more cautious capital from VCs, we’ll naturally see fewer upstarts in the space, which ultimately means less net-new innovation. This isn’t to say new solutions won’t continue to pop up – as we all know, challenging times can be Petri dishes for innovation. But in a space still early in its development, we anticipate the number of new tools to be significantly less than what we’ve seen in the past few quarters.
Naturally, there will be solutions that fade away. In the early innings of the creator economy, most new companies threw money around trying to acquire creators and consumers at all costs. This may have worked if we continued in the bubble of 2021, but today’s environment doesn’t quite reward the “growth at all costs” mindset. Not all will be able to survive the downturn, especially if your product positioning and experience don’t have strong moats.
Ultimately, we expect a consolidation of solutions for creators to use. From a user experience perspective, this may not be a bad thing, but it also means a higher number of creators will flock to the same platforms, increasing competition.
We may be wrong about some of the above, but our predictions point towards the same thing: creators will be rewarded on deep follower value over follower growth. The idea of an ‘owned community model’ has been talked about for some time but has never been more important than it is today.
Getting here means understanding your core value drivers:
Food creator Joshua Weissman is a great example of a creator that gets it. At 26 yrs old, he’s amassed 6.5M followers on TikTok, 1.3M on Instagram, and 6.6M on YouTube through years of quality content and value creation for his following. One of the best ways to build a following is to focus on ‘use-case’ oriented content. Josh has a brilliant ongoing series where he recreates popular food dishes… but Faster, Better, Cheaper (click the link and check some out). When it comes to food, aren’t we all just looking for one of those three? It’s a clear reflection that he is a domain expert and understands exactly what his followers want.
However, the point here is he’s passed the three core value drivers with flying colors. His content is pure value, his personality is addicting to watch, and he’s all about community interaction. In fact, he’s transitioned his superfans off social media platforms and onto owned communities like his email list and Discord server - places he has more control and can provide superfans exactly what they’re looking for. His growing Discord server boasts over 53,259 members, with an average daily active user base of 15,000+ fans. The fans help each other by answering questions around recipe challenges, making memes about Josh and printing them onto shower curtains, and collaborating in a channel specifically dedicated to food recipe ideas for his next videos.
It is the epitome of community: a compounding web of value creation. The best part is, Josh has one primary product, his cookbook. No mediocre line of clothing, no digital course, no tip jar. Has he tried other things? Sure. But his unwavering focus and simplicity allow his fans a clear path to supporting him - and wanting more.
Josh isn’t going anywhere, and neither is the 50M+ growing population of digital creators. This bump in the economy is a pivotal one that will create healthy adversity for creators to overcome. These next few years will produce a more resilient type of creator that will drive disruption and ingenuity in building owned communities that give them more content freedom, audience ownership, and transparency on income.
This article was reposted with permission from Saaya Nath and Jack Chen, the creators and writers of Creator Economy-ing. This newsletter provides deep commentary about the Creator Economy, but specifically the Creators.
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The opinions expressed by Saaya Nath and Jack Chen are their own and not reflective of Jump Capital or SWIDIA.